We are less than a week into “Spring” but the Spring Market has already begun in Westchester. Things are getting busy, as the cyclical nature of our industry turns to the most active period between now and July 4th. If this is the year you are looking to buy that first home, or even if you are looking to sell and perhaps “move up” you should assemble your dream team of professionals to make sure you have all the resources to make the move a happy one. 

Buying or selling a home is typically the largest business transaction of a person’s life. Given the enormous values of property in Wwestrchester and the surrounding areas, there is little room for error. Mistakes can be very expensive. Many of the short sales and pre-foreclosures I have sold in the last 2-3 years had their genesis in early mistakes. Choose your professionals wisely. 

1. Your Agent. Ideally, a full time agent with a verifiable track record, references and a plan of action that makes sense to you is where to start. Interview at least 3 agents. Common mistakes to avoid are not verifying the agent’s claims, credentials, or experience. 
2. Mortgage professional. If you are going to buy, the first thing to do is get pre approved. It takes 15 minutes on the phone to start, costs nothing, and will let you know exactly what you can afford. Don’t choose an out of town lender or one that sells their wares solely on rate alone. 
3. Attorney. We are an attorney state, and in Metropolitan New York attorneys also prepare contracts and run title. They are the broker’s partner in negotiations and troubleshooting, and they also deal closely with your loan officer. Given that the other side will have an attorney, you want a lawyer that is local, responsive,a dn specializes in real estate. Choosing your union attorney or a friend to same a small fee is flirting with disaster. We recently had a buyer client use an attorney who cost them $15,000 when he did not attend to an issue clearly.
4. Home inspector. If you are buying a house, get it inspected. Period. You want, ideally, an ASHI member, and one who is thorough, provides photos in their reports, and not an alarmist. It should cost $500 or so for a typical starter home. It is worth 10 times that amount.   

A Shameless, Brazen Self Pimping Piece Follows. All sold data is taken from the Empire Access MLS: 

Much like the rest of the country, there is still a significant malaise over the Westchester County real estate market. From January 1, 2010 until March 26, 2010 there were 708 single family homes sold in Westchester County at a median sale price of $600,000. In that same period of 2011, only 662 single family homes closed, and they had a median price of $560,000. 

Prices are down 7% in Westchester and transaction totals are down 6% overall. Not good. 

J. Philip Real Estate, however, is not having the same downward trend in the least. As I do every quarter, I have run the numbers, and they are showing we are bucking the trend enormously.

In the first 116 days of 2010, our company had only 5 closings with a volume of $1.6 million. In that same period of 2011, we have closed 15 transactions with a volume of $6.2 million. Sales volume is up 300% and dollar volume is up 400%. 

Looking at homes under contract, we are poised to have an even more active 2nd quarter. As I type this, before April 1 is even here, we have contracts on 8 properties at a dollar amount of almost $3 million. Our team is out there making things happen. It’s not just hard work- I expect that my colleagues at other firms are also working very, very hard.

Our marketing machine is getting our listings out front.
Our short sales are getting approved and closed successfully.
We are converting offers to contracts-no easy feat in this climate.
Our social media efforts are bearing fruit.  
Our clients are taking our advice to get the desired outcome. This cannot be stressed enough. Our sellers are pricing to sell, and our buyers are out there to buy.  

We are getting it done all over Westchester and Putnam counties: Pelham, Chappaqua, Scarsdale, White Plains, Yorktown, Tuckahoe, Peekskill, Ossining, Hartsdale, Ardsley. You name it, we are getting the deals done.  I couldn’t be more proud of our team, and I couldn’t be more pleased that our plan of attack is working. 

Recent posts:
Short Sale Seller: Everyone is Getting Paid But Me.
Why I Will Happily Shell Out the 40 Bucks

Just about every home sale is stressful on the seller. A short sale, given the higher stakes and financial ramifications, often has even more stress for the seller than a typical transaction. On a few occasions, I have had a short sale client lament that they are “left out” in a way, in that everyone is going to walk away from the closing with money except them. Short sale sellers realize no proceeds at closing. 

I recall the first instance where this occurred; the seller didn’t really want to sell, and was dismayed at what her perceived as a feeding frenzy around him over his loss. The agents were making a fee, the lawyers were getting a check, and he’d lose his house. It didn’t seem right to him. The listing expired unsold 3 years ago, and it remains unsold with the 3rd listing agent. I don’t think the people could let go. 

So what it in it for someone to do a short sale when they don’t get any money? Quite a bit if you ask me. 

You avoid a foreclosure. A good point was made by the Distressed Property Institute in the CDPE course: negative trade lines lose their punch and fall off over time, but the one question on every mortgage application is “have you ever had a foreclosure?” 

You leave your home with dignity. That goes for you and the neighborhood. Anyone who sells their home moves out on their own terms. Nobody evicts them, and nobody knocks on the door informing them he represents the lender and the house is now theirs. Short sale sellers pack their things and move to their next home like anyone else. And the neighborhood avoids the blight of a bank owned REO and all the baggage that comes with it. 

You minimize the impact to your credit. A foreclosure is a nuclear event in credit. I could name nothing worse. While many people who do sell short have late payments, if they manage things correctly they can often be qualified to buy again in 24 months.

You avoid a deficiency judgment. A properly negotiated short sale typically results in the waiver of any deficiency. The slate is wiped clean. As I told my former client, if he just let the house go to foreclosure he wouldn’t get any money either. Worse, a deficiency judgment could haunt him thereafter. 

I suppose there are other reasons, but to those who view a short sale as unpalatable, I would ask what they’d propose as a better option. Sometimes you have to choose your poison. Banks aren’t modifying loans these days- as a matter of fact, many of my clients came to me after they were turned down a 2nd and 3rd attempt to modify. You may not walk away with money in a short sale these days. But in a successfully negotiated short sale, do do get something few people consider: a second chance. 

To add one more point, there are programs coming into prominence that do offer sellers a small stipend in a short sale, some as much as $7,000. I saw a letter from Chase today referencing up to a $20,000 credit for a short sale. I am sure the small print is copious for that, but HAFA is the first place we are going with our clients in short sales so they can get a credit from their lender at closing. Not every short sale broker is alike. You need a good one who knows how to get the debt discharged and the deficiency waived. 

For my colleagues in the real estate industry…”politics makes strange bedfellows”

I’ll preface my thoughts by tipping my cap to the memory of Elizabeth Taylor to make a point: when you think of the late Ms. Taylor, what number do you first think of? 

If the number is her 8 marriages, may I suggest 100,000,000. Because she raised $100 Million for AIDS research, much of it before anyone else jumped on board. Notable people and notable things are more than what they seem. I’ll keep 8 with Yogi Berra. 

There has been much written, often with angst, about the proposal by NAR to essentially charge every member another $40 annually to support what is referred to as the “Realtor Party.” I have given this some serious thought the past few days and the kernel of my conclusion is what I first wrote on Jay Thompson’s article about the matter: I believe that NAR’s hand was forced because the important work done by RPAC, the Realtor Political Action Committee, is not supported by enough members. 

I am as guilty as anyone. I never knew much about RPAC until I attended NYSAR’s mid-winter meeting in Albany last month. There, I saw firsthand the crucial- and I do not use that word lightly- advocacy that RPAC does for our members and industry. I saw a work group of our best and brightest discussing how to address proposed laws in Albany that would impose draconian restrictions on advertisements by brokerages, as if we weren’t already over regulated. 

For those of you who either say or nod in agreement that your NAR membership is good for MLS membership and little else (see my remark on the late Ms. Taylor), let me give you a few thumbnails on the important work RPAC has taken on:

• RPAC has successfully kept banks out of the real estate industryy. Chew on that if the short sale or REO process work for you. 
• New York finally passed a Commission Escrow Act which mandates that sellers who dispute and withhold a broker commission deposit the funds in escrow and go to arbitration. This is far better than having to litigate what in two cases of my own were simply dishonorable deadbeats who thought they’d steal services. 
• RPAC is fighting transfer taxes, which are the tax de jour of some municipalities who face the consequences of their bloated budgets. Transfer taxes hurt our industry and really hurt the consumers, especially sellers who need every penny of equity they can get and buyers who are already beset with trepidation in this climate. New York transfer taxes are the highest I know.
• They are working to preserve the mortgage interest deduction, which should need not a syllable of debate in this forum. Not a syllable. 

What Can You Buy for $540,000 in Tuckahoe, NY? 

$540,000 goes alot farther than a few years ago in places like Tuckahoe. Take for example this 4 bedroom, 3 bath 2800 square foot home our buyers recently closed on. They got a big living room and formal dining room, a family room with a fireplace, a beautiful stainless steel and granite kitchen, and a finished basement. The yard is almost a quarter acre, and there is also a rear deck and a 2-car garage. The location is stellar- transportation, shopping, schools and even Concordia College are all within 5 minutes. 

Congratulations to our buyer clients, who made a long journey with us to get their keys, and to Tom Ricapito, buyer agent extraordinaire. 

It all starts out innocently enough. The seller comes in at the tail end of the home inspection and meets the buyer. They press the flesh, exchange some small talk, and the conversation drifts around to the furniture. The seller might be willing to sell some. The buyer likes some of the pieces. Like many social ships that pass in the night, they say they’ll be in touch. My people will call your people. 

If only it ended there. But sometimes it doesn’t, and the outcome is seldom productive relative to the effort required. 

The buyer agent contacts the listing agent to let the seller know that if they want to leave some of the furniture, that’s fine with the buyers. 

The seller says wait, I said they could buy it. I’m not giving it to them. Call their agent and ask when they’d like to come by and pick out what they’d like to make us an offer on. 

A week, 3 emails, and 4 calls later, two real estate agents that were brokering a half a million dollar deal are now arguing over whether there is more value to one guy buying a chaise lounge than the seller saves by not having to load the thing into a moving van and driving it 2 states away.

Now we have a flea market. 

The principals, sensing that the agents might not want to broker furniture (the nerve for what we’re paying them!) decide to cut through all the parliamentary procedure and deal with each other directly. The buyer arrives on a Saturday morning to see if the sofa is worth throwing a few dollars at. Hey, while we’re there, let’s measure some rooms. The seller, recalling that the buyers mentioned they liked macrame, wonders if they’d like the basement workbench. 

3 hours later, after discussing everything from whether or nor George Lazenby would have been a good 007 if he stuck it out to the true ant-oxidant power of dark chocolate, the buyer sees an ant on the kitchen floor. On their drive home, they recall a puddle in the garage that seemed strange. And what was that smell? Did the neighbor look at us funny as we arrived? Did you see that tree in the back yard? THAT will have to come down sooner or later. Was the seller serious when they made that throwaway remark about the Norwegian parliament ? 

That week, the buyer agent faxes a mortgage denial letter to the seller’s attorney. Please send back our money. We got turned down. So sorry. 

Think it hasn’t happened? 

It sure has. Many a deal has died over a stupid sofa. And those that don’t can get unecessarily messy and complicated. My clients want me dealing with bankers, lawyers and appraisers, not getting the blue book value of a gas barbecue for some other guy. 

Take my advice. Put the furniture on Craigslist if it wasn’t part of the original deal. Don’t make the agents run a flea market, because it isn’t our area of expertise and opens us to liability, and don’t be a wheeler dealer with your counterpart over lawn furniture. Keep your eye on the big prize, the sale of the home, and don’t bog down the biggest transaction of your life over an impromptu garage sale. 

For my fellow agents: 

Steve Loynd has written a post I relate to quite a bit- the experience of shelling out big bucks to a service that promises to deliver a pipeline of prospective buyer clients to your inbox, only to pull the plug after thousands of dollars down the drain with no return on the investment.

The proposal typically goes like this: Pay us $XXX and our super duper Magic Internet machine will send hot, eager, ready to bust out their checkbook buyers right to your inbox. Sure, the fee seems hefty, but if you sell JUST ONE it pays for the whole year! After that it is all gravy! Then, you can build a team of happy, busy buyer agents and by this time next year you’ll be loaded and prosperous. You’ll be acne free, lose weight, and that foot corn will go away. 

Only, it never works that way. After three or six months and a few grand sucked out of your account you pull the plug because the quality of the contacts is awful. Half the phone numbers are (123) 456-7890 and many of the emails addresses are no@nev.er. What’s wrong with this picture? What happened to the super duper Magic Internet machine?  

Allow me to explain something, and I’ll preface my words with the caveat that my numbers may be modest in some areas of the country, but they put me in the top 10 of my 7500 member MLS for transactions every year since 2007: I have over 250 closings to my credit since June 2006. Not one of the people who bought with me or bought one of my listings ever said they wanted an agent. 

They wanted a home. 

A guy sitting in front of his computer looking for something with a 2-car garage and a flat back yard isn’t going to jump for joy because you have integrity and are the assistant commissioner of the town little league. Not enough people will care that you have your cocker spaniel in your picture and teach Sunday school if they don’t know you know where they’ll get that 2-car garage and back yard. They get online, log onto a home search or google a neighborhood, address or town, and start looking. That’s when they get to us. A few may call an agent first, someone in their sphere perhaps, but you can’t build your career on such a thin slice of the pie. They seek a home. If you don’t have inventory on the shelf, you get no traffic. It is as simple as that. Get more listings. Inventory, or at least the access to it, gets buyers. 

Think I’m wrong? Fine. Consider this: even Redfin, which touts commission rebates, transparently rated agents, and overall seeks to offer a better mousetrap, has a killer home search. That’s how they get their people. And I know. What about EBAs? Exclusive buyer agents have no listings! So what? They still have a home search on their site if they have half a brain! That is the key to the kingdom- homes. 

How useful is your home search? Do you highlight it? Do you know how to work the back end of registered users? Do you incorporate it into your blog? Or are you tapping away, letting everyone know where the fireworks are this weekend & where to drop off their recyclables, only to have people use someone else to buy a home? Do you like it when you go to a restaurant and the server is overcharming and all you want is a menu? How do you think buyers feel? 

They do not care about your flair. 

My point, and it really is the keys to the kingdom if you want a bigger slice of the pie, is that in 2011 you either have to get listings, have a superior IDX home search on your site, or both if you want to grow. Get more listings. Get a good IDX and don’t keep it a secret. Link to it. Use it. Pimp it. If you are blogging, make your home search the call to action in all your posts. 

There it is, folks. Disagree if you want, but what I just told you works for every business model I know, and my firm has been my laboratory on the matter since 2005. 

What Does $825,000 Buy in Pelham, NY? 

Here’s what you can get for $825,00: A 2300+ square foot 4 bedroom 3 bath 1920’s Lewis Bowman designed New England colonial on over a third of an acre in Pelham Manor. It has a rocking chair porch, patio, plenty of parking, and a manicured lawn.

Inside is exquisite, charming, and updated: Stainless steel kitchen appliances, butler pantry, huge living room with fireplace, formal dining room, all while retaining the 1920’s character.

We just closed on it this past week after listing it this past August and going under contract shortly thereafter in November. 

If you’d like to search homes like this one in Pelham or the surrounding area, get yourself a FREE Listingbook account and search the MLS like an agent.